Florence, Italy — Washington D.C. is 7000 km to the west of Italy – and Beijing is another 8000 km to the east, but the cold war between the US and China over trade is expected to hit the fashion industry here like the perfect storm.
Pronounce's Spring/Summer 2020 show in Florence as Pitti Uomo's Guest Nation China special event. Photo by NOWFASHION.
According to industry leaders selling and bartering for goods on the floors of Pitti Uomo, the world’s leading menswear event, the US President’s policies will reverberate throughout the world, with European merchants stuck somewhere in the crossfire.
“It’s pretty selfish what Trump is doing, really,” said Fabrizio Servente, Global Strategy Advisor for The Woolmark Company. “It really does not help to promote healthy commercial relations on a global level,” Servente said, adding that China controls the supply of wool and is the most important market for wool mills and manufacturers of wool garments in Europe.
After the Trump administration raised the stakes on US tariffs on 200 billion Chinese goods to 25 percent from 10 percent and China responded with $60 billion in tariffs on US imports, stocks plummeted worldwide.
The Dow Jones dipped 221 points, its lowest level in four months, and Italy’s main index, the FTSE MIB, lost 1.29 percent.
A consumer spending slowdown is predicted for both the US and China, two of Italy’s key markets.
According to data compiled by Italian statistics office Istat, China was Italy’s eighth largest consumer of Italian menswear exports by revenue in 2018. Exports to China represent 4.7 percent of the total of all menswear goods sold by Italy to Extra EU countries.
The United States was the fifth largest, representing 8.6 percent.
What is perhaps more worrisome is that China is Italian fashion’s top supplier, with 17 percent of the market share of menswear imports in 2018.
“This is shaping up to be a difficult year,” Pitti Immagine CEO Raffaello Napoleone said at a press conference. “We forecast a slowing of the ongoing positive trend.”
I GO OUT - Curated by SSAW Magazine show in Florence. Photo: Courtesy of PR.
With its fragmented government and dueling political parties leading the nation, Italy is embroiled in crisis. It also recently pulled itself out of its third recession in a decade.
Looking ahead, Italian industrialists predict a decrease in personal spending and an increase in savings, as well as more turmoil among brick and mortar retail businesses in Europe.
At the same time, some feel that a slowdown in Chinese imports to the US could make room for more European goods.
“We have worries, but at the same time, we realize there can be opportunities,” said Mario Dell’Oglio, head of Italy’s Chamber of Buyers.
Dell’Oglio, who also runs the Dell’Oglio boutiques in Palermo, a historic chain his great-grandfather founded in 1890, explained that US consumers prioritize price over quality and are always on the lookout for bargains both in brick and mortar stores and online. “Our challenge will be to convince the US consumer to buy our products at full price. And that’s almost impossible.”